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Tuesday, March 26, 2013

Londonderry flea market owner enters mediation after Coach’s federal lawsuit claiming sale of counterfeit handbags

CONCORD – The owner of a popular flea market in Londonderry, who was sued for selling counterfeit Coach handbags, has entered mediation to try to settle the lawsuit.

Peter Sapatis was accused by Coach Inc., a seller of high-end designer handbags, with violating counterfeiting and trademark laws. Coach accuses Sapatis of knowingly selling knockoff handbags at the Londonderry Marketplace in violation of counterfeiting and trademark laws. ...

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CONCORD – The owner of a popular flea market in Londonderry, who was sued for selling counterfeit Coach handbags, has entered mediation to try to settle the lawsuit.

Peter Sapatis was accused by Coach Inc., a seller of high-end designer handbags, with violating counterfeiting and trademark laws. Coach accuses Sapatis of knowingly selling knockoff handbags at the Londonderry Marketplace in violation of counterfeiting and trademark laws.

Coach sued Sapatis for more than $15 million in U.S. District Court late last year.

Andrew Cernota, a member of the Maine Cernota & Rardin firm in Nashua, said similar suits pitting retail giants against small businesses are not rare – particularly by purveyors of luxury goods that depend heavily on the cache that comes with their name.

“If you think of how important a brand name is to a company like Coach, I mean, a lot of the value associated with the product is based on its brand name, so you can expect them to be fairly aggressive in protecting it, and in fact, that’s due to the trademark ownership,” Cernota said. “The real question is sort of on this issue … the argument is whether the owner of the flea market is the one really responsible here, and I assume that they would address that in the course of their pleadings. And arguments countering that.”

Judge Paul J. Barbadoro assigned retired Magistrate Judge James Muirhead as a mediator at the request of Coach and Sapatis’ lawyers, according to court documents.

Specifically, Coach accused Sapatis of allowing as many as 30 vendors at his outdoor flea market, to engage in “designing, manufacturing, advertising, promoting, distributing and … selling products ‘bearing logos and source-identifying indicia and design elements that are studied imitations of’ ” Coach trademark products.

Sapatis’ attorneys filed a response to the suit in February denying virtually all of the charges, arguing the company failed to meet the legal demands of statute of limitations, burden of proof, and inaction or omissions, according to court documents.

The New York-based Coach, which designs and sells handbags, shoes, wallets, coats, jewelry, stuffed animals and other clothing and fashion accessories, states in the suit that Sapatis and Londonderry Marketplace ignored letters sent by Coach attorneys in 2011 warning him to stop vendors from “trafficking in counterfeit merchandise.”

An authentic Coach handbag can sell for hundreds of dollars, or more than $1,000 depending on the quality and style of the bag.

Coach states in its federal suit that investigators sent to Londonderry in June 2011 “observed approximately 30 different vendors” selling “the infringed products.” The investigator purchased six items, then handed Sapatis a cease-and-desist letter, according to the suit.

Despite the warnings, Coach states, Sapatis failed to take steps to evict the offending vendors and continued to ignore several further “cease and desist” letters that Coach attorneys sent in August 2011 and again in April and May 2012.

When yet another visit in October 2012 revealed at least 12 vendors still selling “infringed products,” Coach stated, the company chose to file suit, claiming Sapatis’ “actual knowledge of the sale of ‘infringing products’ coupled with the failure to take sufficient … steps to stop such sales (by marketplace vendors) constitutes willful blindness.”

The suit also asks the court to grant an injunction stopping Sapatis and the marketplace from creating, advertising or selling Coach knockoffs, as well as to award the company $2 million “per counterfeit mark per type of infringing.” Coach also asks it be awarded “actual, statutory and punitive damages” and that Sapatis be ordered to pay the company’s legal costs.

The total amount in damages and other awards Coach is seeking isn’t clear but appears to exceed $15 million.

Joseph G. Cote can be reached at 594-6415 or jcote@nashuatelegraph.com. Also, follow Cote on Twitter (@Telegraph_JoeC).